A statement released on Tuesday morning on the club's website read: "Manager Dean Saunders has been informed by Wolves that his contract is to be terminated. The decision has been made following confirmation of Wolves' relegation to League One. Assistant manager Brian Carey will also be leaving the club.

"Wolves have now begun a recruitment process, which, in conjunction with the board, will be managed by head of football development and recruitment Kevin Thelwell. The club will now take as long as is necessary to make this crucial appointment and there will be no publicly communicated timescales.

"Wolves would like to thank Dean and Brian for their efforts in what has been a very difficult period for everyone, and wish them both the very best for the future. The club will be making no further comment at this stage."

Saunders, a former Liverpool and Aston Villa striker who began his managerial career at Wrexham, took over as Doncaster manager in September 2011. He was unable to halt Doncaster's slide into League One last season, but galvanised the South Yorkshire club and steered them into second place in the table before leaving to take charge of Wolves.